Measuring Productivity and Efficiency

All,

I am curious to what extent the rest of the Army is linking efficiency and productivity measures to unit funding.

About three years ago (around 2005/2006), the Army Medical Department (AMEDD) introduced PBAM (Productivity Based Adjustment Model) in an effort to link resources to outcomes. PBAM is actually a very complex, multi-component model, but in the interest of brevity and simplicity, this blog entry will only address the productivity and efficiency components. These components:

1) compare productivity against previous reporting periods,
2) compare efficiency against industry or command accepted and published standards,
3) financially reward or penalize health care facilities for their status compared to a base period.

Recurring reports are based on a rolling 12-month period, published monthly and compare the most current 12-month period against a 12-month base period. The defined base period is refreshed every fiscal year. Financial adjustments are cumulated and made three to four times a year.

For the pure productivity component of the model, each patient encounter is converted to an industry-accepted measure of work that is weighted to account for different levels of resource requirements. In an inpatient setting, these measures of work are referred to as RWPs or Relative Weighted Products, and in the outpatient setting, they are referred to as RVUs or Relative Value Units. If a facility’s aggregate productivity falls below the baseline, a negative adjustment is imposed. If productivity is above the baseline, the facility receives a positive adjustment.

The efficiency component compares a business unit’s productivity per provider per day against industry accepted and published standards. If the business unit’s efficiency falls below the benchmark, a penalty is imposed. When efficiency is above the benchmark, the facility receives a positive financial adjustment.

This is a very summary explanation of PBAM as a catalyst for further discussion. If so inclined, I am interested in reading how other Army departments are linking business unit productivity to resources in an effort to be better stewards of the tax dollar.

Thanks!

Burke

Major Burke Bristow
Student, Command and General Staff College, ILE
Ft. Belvoir, VA

The views expressed in this blog are those of the author and do not reflect the official policy or position of the Department of the Army, Department of Defense, or the US Government.